Case Digest (G.R. No. 68375)
Facts:
Commissioner of Internal Revenue v. Wander Philippines, Inc. and the Court of Tax Appeals, G.R. No. 68375, April 15, 1988, Supreme Court Third Division, Bidin, J., writing for the Court.The petitioner is the Commissioner of Internal Revenue; private respondent is Wander Philippines, Inc. (Wander), a domestic corporation wholly owned by Glaro S.A. Ltd., a Swiss corporation not engaged in trade or business in the Philippines. Wander remitted dividends to Glaro for the second quarters of 1975 and 1976, on which it withheld and paid the statutory 35% withholding tax (P77,700 for 1975 and P124,320 for 1976).
On July 5, 1977 Wander filed with the Appellate Division of the Bureau of Internal Revenue a claim for refund and/or tax credit in the amount of P115,440, asserting entitlement to the preferential 15% withholding rate under Section 24(b)(1) of the National Internal Revenue Code as amended by Presidential Decrees Nos. 369 and 778. After the Bureau failed to act on the claim, Wander filed a petition with the Court of Tax Appeals on July 15, 1977. Petitioner filed an Answer on October 6, 1977.
The Court of Tax Appeals, in a January 19, 1984 Decision, ordered the refund and/or tax credit of P115,440 to Wander, finding that the 15% preferential rate applied. The Commissioner filed a Motion for Reconsideration on March 7, 1984 which was denied on August 13, 1984. The Commissioner then brought this petition for review on certiorari to the Supreme Court.
Petitioner raised two assignments of error: (1) that Wander was not the proper party to claim the refund because the tax payer was Glaro, and (2) that...(Subscriber-Only)
Issues:
- Is Wander Philippines, Inc. the proper party to claim refund of the overwithheld dividend tax?
- Did Switzerland satisfy the condition in Section 24(b)(1) — i.e., does Switzerland allow a tax credit equivalent to the 20 percentage-point portion so as to permit the 15% preferential withholding rate on d...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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